Minnesota Slams IBM On Health Insurance Exchange Woes

Add Minnesota's state-run MNsure website to the list of troubled health insurance exchanges. The site launched October 1, but it's plagued by problems that Minnesota Governor Mark Dayton is pinning largely on software from IBM.

In a five-page letter sent to IBM CEO Virginia Rometty on December 13 and made public by the governor's office on Friday, Dayton detailed 21 specific problems tied to IBM's Curam software. "Your product has not delivered promised functionality and has seriously hindered Minnesotans' abilities to purchase health insurance or apply for public health care programs through MNsure," Dayton wrote. "I request that you immediately deploy whatever people or resources are needed to correct the defects in your product that are preventing Minnesotans from obtaining health insurance through MNsure."

IBM did respond immediately, meeting with state officials and sending dozens of employees to St. Paul to fix the site in mid December. In a statement issued on Friday, IBM said the majority of the concerns about its software had been addressed, and it noted that it's providing onsite services and technical resources -- at no cost to the state -- that go beyond the scope of its contract.

"IBM is just one of several subcontractors working on this project," said IBM spokesperson Mary Welder in a statement. "The prime contractor, Maximus, Inc., has overall responsibility for the MNsure system including integration and testing of all the components prior to October 1."

Like other states choosing to run their own health insurance exchanges, Minnesota was under the gun to get its health insurance exchange site up and running before the end of the year in order to meet the coverage mandates of the Affordable Care Act (also known as Obamacare). The problems experienced on MNsure have included lost applications and inaccurate assessments of eligibility for financial assistance.

Maximus, of Reston, Va., is the lead contractor on the $46 million project, while IBM’s Curam software determines each applicant's eligibility for Medicaid and state and federal subsidies and tax credits. Acquired by IBM in 2011, Curam software is designed specifically for health and social program management, and IBM says it's used in more than 80 government projects around the world.

Minnesota's MNsure health insurance exchange site was down over the weekend as work continued to address technical problems.

In some of these cases IBM has portrayed itself as the deep-pocketed scapegoat for problems that went beyond its contract or control. In Queensland, for example, IBM said the project failed in part due to the state's business processes and data-migration efforts, and it pointed out that its fees of $25.7 million accounted for less than 2 percent of the $1.2 billion the state said it would cost to fix the system.

IBM is one of four technology providers on the MNsure project, but IBM said it's working closely with the other suppliers and with state agencies to fix the problems that remain. "We are providing on-site services and technical resources beyond the scope of IBM's contractual responsibilities to assist the State in resolving the remaining issues as quickly as possible," the company stated.

According to Republican State Representative Greg Davids, the letter from Dayton, a Democrat, was simply an attempt to shift blame away from his administration.

"For weeks now, Minnesotans have received conflicting information from MNsure about whether they have coverage, what coverage they have and how many more hoops they have to jump through to obtain coverage," Davids told the St. Paul Pioneer Press. "Enough is enough -- what happened to 'the buck stops here'?"

Doug Henschen is executive editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data, and analytics. He previously served as editor-in-chief of Intelligent Enterprise, editor-in-chief of Transform Magazine, and executive editor at DM News.

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Terry, as someone that worked at IBM in Rochester for 12 year I can tell you IBM Rochester is no major employer in Minnesota anymore. Yes, they used to be but are not anymore. And I say I used to work there because in the my last two years there 50% of my co-workers lost their jobs as the jobs were being off shored to India. So no, Rochester does not have a large group of Indian workers, the jobs were moved to India.

As far as your last paragraph, I agree with ya, that's not a software/integration problem, thats a data entry problem.

This is another example of a complex IT integration project. The difficult part of IT work is not about single piece of software but the integration, especially how you get products from different vendors work together. The technical stuff is just one side of the coin. On the other side the project management stands out - e.g. do you have a concrete but lean process following the recommended guideline, e.g. PMI guidance or PRINCE2 guide. But even all these conditions are met, somethings the chaos can still happen.

In ansewr to Rob's question below, "Where's the prime contractor in all of this?" I suspect the prime contractor is leaning over the governor's desk and whispering in his ear. Yes, what's happening is poor form and IBM is both fixing the problem and serving as the scapegoat. The governor is watching Obama's approval rating go down and covering himself.

Yes, and the public sector operates quite differently in terms of the freedom a CIO has to choose contractors. GM can pick the best partner for the job, period. A gov IT exec needs to navigate a truly broken procurement system. Still, agree with Rob, it's bad form to go public like that.

Chris, I agree, shifting responsibility to the outsource contractor is dodging responsibility. But it probably deserves mentioning: The CIO doesn't always hold all the calls at the table, so one needs be careful about adoping Syzgenda's philosophy too literally.

It just seems to me that, rather than take responsibility for fixing the site, the Minnesota governor is trying to relieve himself of all responsibility. And he's not pointing the finger at the prime contractor but at the biggest name subcontractor: IBM. From what Doug says, IBM's software was indeed at the root of the problem, or was one significant part of the problem, but outing IBM while it's trying to make good is bad form. It's not like IBM ignored the governor's letter. It's throwing resources at the problem. And where's the prime contractor in all of this?

Curam Software, the IBM unit deeply involved in this deployment, was headquarted in Ireland before it was acquired in 2011. Do you have racial/nationalistic slurs you also want to heap upon Irish people, WakjobDunfor?

That's funny, been using IBM servers and support since 1988 and have yet to meet an Indian IBM worker. Are you telling me the guys in Rochester MN, the home of the i5 server and o/s, are mostly Indian? I think you should recheck your facts, or at least post back what your source is.

Just because 1000 claims were incorrect, is that a software problem or the data loaded into system the software used? I have a hard time believing all these rules are hardcoded in the code. Did IBM really key the data for the rules? Was IBM responsible for the testing of those rules? Seems pretty quick to throw IBM under the bus, especially since they are major employer in that state. Politicians, idiots.

This got me thinking about how now-retired General Motors CIO Ralph Syzgenda, one of the world's biggest buyers of outsourcing, always said execs can't outsource the responsibility, and he'd hold business unit CIOs accountable if the outsourcer they picked failed: "Every time you pick someone, you bet your job here," Szygenda said in our 2002 profile. "That's the way the marketplace is set up."

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